COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders

Abstract

Purpose

This paper aims to evaluate the early effects of the pandemic of coronavirus disease 2019 (COVID-19) and accompanying stay-at-home orders on restaurant demand in US counties.

Design/methodology/approach

The following two sets of daily restaurant demand data were collected for each US county: foot traffic data and card transaction data. A two-way fixed-effects panel data model was used to estimate daily restaurant demand from February 1 to April 30, 2020.

Findings

Results show that a 1% increase in daily new COVID-19 cases led to a 0.0556% decrease in daily restaurant demand, while stay-at-home orders were collectively associated with a 3.25% drop in demand. The extent of these declines varied across counties; ethnicity, political ideology, eat-in habits and restaurant diversity were found to moderate the effects of the COVID-19 pandemic and stay-at-home orders.

Practical implications

These results characterize the regional restaurant industry’s resilience to COVID-19 and identify particularly vulnerable areas that may require pubic policies and managerial strategies for intervention.

Originality/value

This study represents a pioneering attempt to investigate the economic impact of COVID-19 on restaurant businesses.

Citation

Yang, Y., Liu, H. and Chen, X. (2020), "COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders", International Journal of Contemporary Hospitality Management, Vol. 32 No. 12, pp. 3809-3834. https://doi.org/10.1108/IJCHM-06-2020-0504